Canadians "Celebrate Tax Freedom Day on Eve of Canada Day
Contact:
Michael Walker, Executive Director
The Fraser Institute, (604) 714-4545 Email: michaelw@fraserinstitute.caJoel Emes, Research Economist
The Fraser Institute, (604) 714-4546, Email: joele@fraserinstitute.caRelease Date: 30 June 1997
VANCOUVER, BC>>> Canadians will work until June 29 to pay the total tax bill imposed by all levels of government, according to calculations released today by the Fraser Institute. Tax Freedom Day is therefore June 30th. The Institute has been calculating the comprehensive tax burden for the average family in Canada and each of the provinces since 1977.
Tax Freedom Day is the day when the average Canadian family starts working for itself. Until that date, all of a family's earnings are required to pay the taxman. Since 1961, Canada's Tax Freedom Day has advanced 58 days. In 1961, Tax Freedom Day fell on May 3rd. By 1974, it had advanced to June 8th, and in 1997 Tax Freedom Day falls on June 30th (see tables).
"Canadians have good reason to take a day off on Canada Day: they've only just paid off their total tax obligations," said Fraser Institute Executive Director Michael Walker. "But the steady advance of Tax Freedom Day is no cause to celebrate, not when six-month's earnings go into the unsteady hands of government."
Tax Freedom Day for each province varies according to the extent of the provincial tax burden. The earliest Tax Freedom Day falls on May 19th in Prince Edward Island, the latest date is July 12th in Saskatchewan.
Prince Edward Island, Quebec, and Manitoba experienced an advance in their Tax Freedom Days, meaning that residents of those provinces have to work more days per year to pay off their obligations to government. Tax Freedom Day is earlier than last year in Newfoundland, Nova Scotia, New Brunswick, Ontario, Saskatchewan, Alberta, and British Columbia.
Due to interest about the fairness of the Canadian tax system, the Fraser Institute recently began reporting the decile distribution of income and taxes with Tax Freedom Days. This distribution shows that the top 30 percent of income earners pay 62.4 percent of all taxes and earn 54.6 percent of all income. The bottom 30 percent of income earners pay 5.6 percent of all taxes and earn 10.5 percent of all income.
The average Canadian's tax burden is 49.3% of income. Total taxes of the average family fell $392 from last year.
The Fraser Institute has also calculated what the tax burden of the average family would be today if governments had to cover current expenditures with current taxation and were not able to defer the tax burden by running deficits.
For Canada, Tax Freedom Day including deficits (or Balanced Budget Tax Freedom Day) will be July 16th in 1997, an advance of 16 days over Canada's Tax Freedom Day without deficits. Ten of the 16 days are due to the federal deficit and the remainder to the provincial deficits. The latest Balanced Budget Tax Freedom Day will fall on July 23rd in Ontario, an advance of 21 days over that province's standard Tax Freedom Day.
Currently, tax deferral amounts to $8.8 billion by the provinces and $17.0 billion by the federal government. This compares with $8.4 billion and $19.0 billion respectively in 1996.
The figures released today include revisions to past calculations, which are based on recent provincial and federal budgets and on revised Statistics Canada data.
Click here to view: Tax Burden of the Average Canadian Family, 1997
Click here to view: Table 3: Difference in the Average Family's Tax Bill between 1997 and 1996
Click here to view: Table 6: Tax Freedom Days
Click here to view: Table 7: Tax Rates
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.
For further information contact:
Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca
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